Even though many taxpayers file their tax returns on or about April 15 each year, there is no need to put it off until the last minute. Filing an early tax return can make sense for various reasons, such as getting your refund sooner or minimizing the risk of identity theft.
Even if you don't file early, there are good reasons to begin your tax preparation as soon as you can. For starters, it gives you the time you need to collect the documents and information required to claim all of your deductions—so you can avoid the headache of last-minute stress over receipts.
What's more, if you use a paid preparer, your accountant will have more flexibility and may be able to start working on your accounts sooner. In addition, tax prepares may assess cheaper fees or a lower hourly rate if your tax return is prepared during non-peak periods.
Although the official tax filing deadline for most taxpayers for their 2022 returns is April 18, 2023, the IRS often kicks off the tax season by accepting tax returns as early as mid-January.
- Although most federal tax returns are not due until mid-April, taxpayers can often submit their taxes as early as mid-January.
- Submitting your tax return earlier often means receiving applicable tax refunds earlier.
- By not rushing, you also have time to avoid mistakes that could lead to an audit.
- Tax planning gives you time to estimate capital gains, harvest tax losses, make last-minute charitable deductions, and shift some deductible items to the most useful tax year.
- Tax preparers may give more favorable billing rates to clients willing and able to file their taxes early.
New Standard Deduction
One of the most important decisions taxpayers have to make is whether to itemize deductions or take the standard deduction. Here's a summary of the standard deductions for the 2022 and 2023 tax years:
|Standard Deductions for 2022 and 2023|
|Filing Status||2022 Standard Deduction||2023 Standard Deduction|
|Married Filing Separately||$12,950||$13,850|
|Heads of Household||$19,400||$20,800|
|Married Filing Jointly||$25,900||$27,700|
Sources: Internal Revenue Service
There are additional deductions if you are at least age 65 and/or legally blind by the end of the tax year. If you file a joint return, each spouse who qualifies can claim the additional amount. If you are both 65 or older and legally blind, you can claim twice the additional deduction. Here's a rundown of the additional deductions:
|Additional Standard Deductions for 2022 and 2023|
|Filing Status||2022 Additional Standard Deduction||2023 Additional Standard Deduction|
|Single & Heads of Household|
|65+ or Blind||$1,750||$1,850|
|65+ and Blind||$3,500||$3,700|
|Married Filing Jointly & Married Filing Separately|
|65+ or Blind||$1,400||$1,500|
|65+ and Blind||$2,800||$3,000|
Sources: Internal Revenue Service
SALT Tax Deduction Limit
The tax reforms launched in 2018 also limit your total state and local tax deduction (SALT) to $10,000. This cap may be another incentive to take the standard deduction if your SALT deduction is higher than the new limit and you don’t have a whole lot of other deductions. The SALT tax deduction is currently slated to sunset after 2025. Getting a head start on your taxes will help you avoid unpleasant errors when it comes to this important part of your tax return.
File Early for a Faster Refund
By filing early, you can avoid procrastinating, give yourself peace of mind, and check this important item off your new year’s to-do list. Once the IRS says it will begin processing returns, taxpayers may submit their returns to begin the review process of their return.
For the 2021 tax year, the IRS received over 169 million total tax returns. Of these, 129,841,000 returns were awarded refunds totaling $365.5 billion. If you have money coming to you, there’s no reason to let the government keep it longer than necessary. Filing sooner means a faster refund because the IRS won’t be as busy early in the tax season as it will be in April.
Some people count on their income tax refunds to pay major bills. Filing early puts the money in your hands sooner and may help you avoid taking out an expensive short-term loan to cover those expenses, especially if you’re still paying off your holiday bills. In addition, purchasing power also decreases during periods of high inflation; the longer you wait for your refund, the less that money may be worth.
Filing early makes you much less vulnerable to identity theft. You'll file before an identity thief can step in and file in your name.
File Early to Avoid Identity Theft
The sooner you file, the less time there is for an identity thief to file in your name and take your refund. This can lead to all sorts of tax reporting complications, especially if the thief claims false deductions, fails to report income, or otherwise taints a tax return in your name. Unwinding the damaged caused by a fraudulent tax return can take months.
Unfortunately, you may not know you're a victim of identity theft until the IRS notifies you that there's a possible issue with your return. According to the IRS, you should watch out for potential tax-related identity theft if:
- You get a letter from the IRS inquiring about a suspicious tax return that you didn't file.
- You can't e-file your tax return because of a duplicate Social Security number.
- You get a tax transcript in the mail that you didn't request.
- You get an IRS notice that an online account has been created in your name (and you didn't make it).
- You get an IRS notice that your existing online account has been accessed or disabled when you haven't taken any action.
- You get an IRS notice that you owe additional tax or refund offset, or that you've had actions taken against you for a year for which you did not file a tax return.
- IRS records indicate you received wages or other income from an employer you didn't work for.
- You've been assigned an Employer Identification Number (EIN) without requesting one.
If your Social Security number is compromised and you suspect you are a victim of tax-related identity theft, respond immediately to any IRS notice you receive by calling the number provided on the notice. If your e-filed return is rejected due to a duplicate filing with your Social Security number, complete IRS Form 14039, Identity Theft Affidavit. Visit IdentityTheft.gov for steps you should take right away to protect yourself and your financial accounts.
File Early to Avoid the Tax Season Rush
Filing early gives you time to fully understand any changes to tax law or deal with changes in your life that may alter your filing status. Mistakes from rushing at the last minute can trigger audits that can lead to penalties and interest. Given changes brought on by the TCJA, this point is more important than ever.
Your certified public accountant (CPA) or other tax preparers will not be as busy in January or February as in April. Early access means your CPA will have additional time to consider your situation more carefully and help you with your return. In addition, your CPA may assess more favorable rates during these earlier, slower months.
If you are in the process of buying a home or going back to college (and applying for financial aid), you'll need information from your most recent tax return. Preparing your taxes early will provide you with the most up-to-date information available.
Avoiding Amended Returns
Starting early gives you the time to file an accurate return. An inaccurate return will likely become an amended return. Amended returns invite audits. Here are some things to watch out for as you pursue accuracy.
- Mistakes in official documents. Check all incoming statements, including W-2s, 1099s, interest statements, and anything used to justify a deduction. Companies, banks, and financial institutions make mistakes. Catch them before you file.
- Forms that arrive late. Early filing may cause you to miss forms, including a 1099 or K-1 that arrives late. Make sure you have all the documentation you need before you click “send” or drop your return in the mailbox.
- Incomplete amendments. If you do have to amend your return, don’t correct only the things that are to your advantage. Correct anything that is wrong.
- Tax form changes. As a result of the Tax Cut and Jobs Act (TCJA) of 2017, the layout of Form 1040 changed. In fact, if you previously used Forms 1040-EZ or 1040-A, those forms were eliminated. And if you're an older adult, you can now opt to use the new "U.S. Tax Return for Seniors," 1040-SR.
- Tax-Law updates. Legislation passed before April 15 may not be incorporated into paper tax forms or tax software that has not been updated. Watch the news. Be on the lookout for changes that might have been missed. If necessary, you can file an amended return.
For tax year 2017, for example, private mortgage insurance (PMI) was not initially an allowable itemized deduction. On Feb 9, 2018, a tax law reinstated the deductibility of PMI for taxpayers with less than $100,000 in taxable income. By that point, Form 1098, Mortgage Interest Statement, had already been mailed to taxpayers by their lenders. After the tax law change, an amended Form 1098 had to be sent out by lending institutions. Qualifying taxpayers who had already filed taxes needed to file an amended return to include the additional deduction.
Shifting Tax Burdens
If you take that head start before the end of the year, you will have time to estimate capital-gains distributions, harvest losses, contribute to a 529 savings plan, or make last-minute charitable contributions. You can also take advantage of the opportunity to shift deductible items—such as property taxes, business expenses, or even mortgage payments—to whichever year makes the most sense tax-wise.
You can still maximize contributions to a company 401(k) and/or any individual retirement account (IRA) plans you have and make deposits to your health savings accounts (HSAs) until April 15 of the year following your tax return date.
Time to Save
If you owe money to the IRS, filing early gives you time to save up. Remember, you don’t have to pay until the filing deadline. Waiting only to find out that you owe more than you expected could put a real crimp in your budget. The IRS suggests reviewing your withholdings and tax payments in the final quarter of the year to avoid a surprise tax bill. The IRS has a Tax Withholding Estimator tool, so you can ensure you're withholding accurately.
Should You E-File Your Taxes?
If you mail in your tax return, filing early avoids congestion and a crowded post office. Better to get it done and avoid the hassle. Of course, e-filing is often better than sending in a paper return. According to the IRS, here's why:
- It's the fastest way to get a refund
- It's secure (e-filing uses modern encryption technology to protect your information)
- It's convenient
- You get fast acknowledgment that your return has been accepted or rejected by the IRS
- It's often free (many people can use the IRS Free File tool)
- If you owe taxes, there are several options for making payments
When Is the Earliest You Can File Your Tax Return?
You can prepare your return as soon as you get all relevant and required tax information including W-2s and 1099s. Employers must send W-2s and 1099s by January 31st of the following tax year.
On the IRS side, the government agency often distributes communication in January regarding the official start to the tax season. This notice designates the first official day the IRS will begin accepting returns.
What Is the Deadline for Filing a Tax Return?
Typically, individual income tax returns are due on or around April 15 following the tax year.
If you can't file by the deadline, you can request an automatic six-month extension by filing Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. File the extension request before the due date of your return. Remember that an extension is not an extension of the time to pay tax, so you'll owe interest if the tax you owe isn't paid by the original due date of your return (usually April 15).
The Bottom Line
Most experts agree that it’s best to start your return as early as possible. The decision to file early may depend on the complexity of your return if you are receiving a refund. Follow the advice of your financial or tax advisor to make sure your return is accurate and complete.
Internal Revenue Service. "2023 Publication 509."
Internal Revenue Service. "IRS Provides Tax Inflation Adjustments for Tax Year 2022."
Internal Revenue Service. "IRS Provides Tax Inflation Adjustments for Tax Year 2023."
Internal Revenue Service. "Topic No. 551 Standard Deduction."
Internal Revenue Service. “Rev. Proc. 2021-45.” Page 14.
Internal Revenue Service. "Rev. Proc. 2022-38," Page 14.
Internal Revenue Service. "With New SALT Limit, IRS Explains Tax Treatment of State and Local Tax Refunds."
Internal Revenue Service. "Filing Season Statistics for Week Ending December 3, 2021."
Internal Revenue Service. "Taxpayer Guide to Identity Theft."
Internal Revenue Service. "All Taxpayers Will File Using 2018 Form 1040; Forms 1040-A and 1040-EZ No Longer Available."
Internal Revenue Service. "About Form 1040-SR, U.S. Tax Return for Seniors."
Internal Revenue Service. "2019 Publication 936," Page 8.
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Internal Revenue Service. "IRS: Check Tax Withholdings Now as the Last Quarter of 2020 Begins."
Internal Revenue Service. "Six Reasons to E-file."
Internal Revenue Service. "Topic No. 752 Filing Forms W-2 and W-3."
Internal Revenue Service. "Topic No. 301 When, How, and Where to File."
Internal Revenue Service. "About Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return."
Internal Revenue Service. "IRS Reminds Taxpayers an Extension to File is Not an Extension to Pay Taxes."
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